JRSSEM 2021, Vol. 01, No. 2, 64 – 78

E-ISSN: 2807-6311, P-ISSN: 2807-6494

DOI :10.36418/jrssem.v1i2.10 https://jrssem.publikasiindonesia.id/index.php/jrssem/index

Analysis of Effect on Asset Return, Return on Equity,

Earning Per Share, and Net Profit Margin on Share

Price on Banking Company

Agnes Claudi

Menik Indrati

1.2

Esa Unggul University, Bekasi, Indonesia

e-mail: agnes.claudia94@gmail.com

, menik.indrati@esaunggul.ac.id

*Correspondence: agnes.claudia94@gmail.ckom

Submitted: 18 September 2021, Revised: 23 September 2021, Received: 27 September 2021

Abstract. The purpose of this study was to analyze the effect of Return On Assets (ROA), Return

On Equity (ROE), Earning Per Share (EPS), and Net Profit Margin (NPM) on stock prices. In this study,

there is one dependent variable, namely stock prices, and four independent variables, namely

Return On Assets (ROA), Return On Equity (ROE), Earning Per Share (EPS), and Net Profit Margin

(NPM). Return on Assets (ROA) is measured by dividing net income by total assets in the company.

Return On Equity (ROE) with return on common equity and net return on common equity, which

measures the return on investment of ordinary shareholders. Net Profit Margin (NPM) is calculated

by dividing the total net profit earned by the company by each sale made. Earning Per Share (EPS)

by dividing the number of each ordinary share produced during a specific period by the shares

outstanding, measured by dividing the total period income available to shareholders from the

company's common shares by the number of ordinary shares outstanding. The population and

sample are 35 companies with banking companies listed on the Indonesia Stock Exchange during

2017 – 2019, so that the research sample is 35 samples, namely 105 companies. The results of this

study indicate that Return On Assets (ROA) does not affect stock prices, Return On Equity (ROE) is

detrimental to stock prices, Earning Per Share (EPS) has a positive effect on stock prices, and net

income. Margin (NPM) does not affect stock prices.

Keywords: return on assets; equity; earnings per share; net profit margin; stock price.

Agnes Claudia, Menik Indrati                                                                                                 | 65 
 
DOI :10.36418/jrssem.v1i2.10          https://jrssem.publikasiindonesia.id/index.php/jrssem/index 
INTRODUCTION 
 
The development of the capital market 
in Indonesia shows that the capital market 
has  become an  alternative investment for 
investors  (Mogonta  &  Pandowo,  2016). 
Public knowledge about the capital market 
is growing, and the number of companies 
listed on the capital market and supported 
by the government to invest plays a role in 
developing the capital market. Its presence 
is indispensable to carry out its role in the 
capital market. The movement of funds is 
growing to maximize the existence of the 
capital  market  (Septyanto,  2013).  
Hermanto  (2017)  said  to  understand  the 
importance  of  investing,  recognize  stocks 
as an ideal investment tool and understand 
the constraints and interests of the public 
as potential investors to attract investors in 
the  Indonesian  capital  market.  Banking 
companies  are  expected  to  have  bright 
prospects  in  the  future  and  have  a 
significant  contribution  to  state  revenues 
(Adrianti, 2019). 
One  measure  of  profitability  with 
Return on Assets (ROA) where E. F. Brigham 
& Joel F. Houston (2008) stated Return on 
Assets (ROA) by calculating the net income 
ratio to total assets in the company. Gitman 
(2003),  in  his  research,  that  Return  On 
Assets  (ROA)  is  a  measure  of  overall 
management  effectiveness  in  generating 
profits  with  available  assets.  In  addition, 
companies  trying  to  get  the  Return  on 
Assets (ROA) value they manage get a high 
value  because  the  higher  the  Return  On 
Assets (ROA) value, the better the company 
uses  its  assets  to  earn  income.  Benefits 
(Efendi et al., 2016). 
The  researcher  shows  the  Return  On 
Equity  (ROE)  earnings  ratio,  which 
measures the level of shares on the capital 
they invest in the company (Kabajeh et al., 
2012). According to  (Brigham  &  Houston, 
2010),  the  investment  level  of  ordinary 
stockholders  and  high  Return  On  Equity 
(ROE),  the  company  managed  to  profit 
from  its  capital.  When  Return  On  Equity 
(ROE)  automatically  increased  sales  of 
company value can impact the company's 
stock  price,  so  that  there  is  a  correlation 
with an increase in stock returns (Almira & 
Wiagustini, 2020). 
  According  to  Gitman,  (2003)  
Earning  Per  Share  (EPS)  is  calculated  by 
dividing  the  profits  available  to  common 
stockholders by the number of outstanding 
shares.  The  amount  of  money  generated 
(return) from each claim, the more excellent 
Earning  Per  Share  (EPS)  value,  and  the 
greater  the  profit  or  return  received  by 
shareholders  (Eko  Meiningsih  Susilowati, 
2015). With a high Earning Per Share (EPS), 
the  company  will  provide  significant 
income  opportunities  for  investors 
(Talamati & Pangemanan, 2015). 
State by Pratama & Erawati (2016) that 
the Net Profit Margin (NPM) by calculating 
the ratio that describes the amount of net 
profit earned by the company for each sale 
made. This ratio represents the company's 
net profit for each sale because it includes 
all elements of income and expenses. And 
capital gains received by shareholders are 
getting bigger.  
The  study  Application  of  Criminal 
Sanctions  Against  Criminal  Acts 
Humiliation  and  Defamation  Through  the 
Internet  where  the  price  of  shares  with 
selling or buying price transactions in the 
securities  market  is  determined  by  the 

66 | Analysis of Effect on Asset Return, Return on Equity, Earning Per Share, and Net Profit 
Margin on Share Price on Banking Company 
 
forced market depending on the strength 
of supply or demand for buying and selling 
or supplying the demand. Aletheari & Jati 
(2016)  state  that  financial  performance 
assessment measures the company's ability 
to generate profits from investments made 
as  a  profitability  ratio.  Fundamental 
analysis is needed that stock price behavior 
is determined by changes in basic behavior. 
Company performance variables. Generally, 
stock  prices  have  a  profitability  ratio  to 
assess the company's ability to seek profits 
within  a  certain  period  (Kasmir,  2012). 
Mogonta & Pandowo (2016) stated that the 
profitability  ratio  is  a  ratio  that  describes 
the  company's  ability  to  earn  profits 
through all existing capabilities and sources 
such  as  sales  activities,  cash,  capital, 
number of employees, number of branches, 
and so on.  
What distinguishes this research is by 
adding  the  Net  Profit  Margin  (NPM) 
variable  and  the  research  object  on 
banking companies on the Indonesia Stock 
Exchange for the period 2017 - 2019. Based 
on the explanation above, the purpose of 
this study is to examine the effect of Return 
On Assets (ROA). . Return on Equity (ROE), 
Earning  Per  Share  (EPS),  and  Net  Profit 
Margin  (NPM)  stock  prices  of  banking 
companies  on  the  Indonesia  Stock 
Exchange for the period 2017 - 2019. This 
study is expected that general investors can 
choose stocks with several things you need 
to know  wrong. The  other is  known  from 
the  profitability  ratio  to  the  company's 
financial  performance  and  can  provide 
benefits for related parties. 
 
Signaling Theory 
Signaling theory was first proposed by 
Spence (1973) in Scott (2015), explains that 
the sending party, namely the owner of the 
information,  provides  the  company  or 
companies in  the form of  communication 
that describes a favorable condition for the 
recipient,  namely  investors  and  investors, 
will  balance  their  behavior  against  the 
understanding  contained  in  the  signal. 
Hartono (2016) argues that the information 
obtained  by  the  company  will  provide  a 
signal for investors to decide to do so if the 
announcement  is  good.  The  market  will 
react  to  a  positive  response  when  the 
information is carried out,  namely  capital. 
Market  participants  take  action.  Purchase 
of  shares  of  a  company  to  increase  the 
trading  volume  of  shares  and  the 
company's  share  price.  Hermanto  & 
Tjahjadi  (2021)  stated  that  in  conveying 
financial information to external parties for 
companies  that  describe  prospects  that 
attract investors to invest in the company, 
they  tend  to  sell  their  shares  if  the 
opportunity is losing. 
 
Positive Accounting Theory (PAT) 
  According to Watts & Zimmerman 
(1986) obtained an alternative approach to 
research in the accounting field known as 
Positive  Accounting  Theory  (PAT)  or 
positive  accounting  theory  by  publishing 
their  research  article.  Toward  a  Positive 
Accounting Theory of Accounting Standard 
in  The  Accounting  Review  in  1978  on 
positive  accounting  theory  is  concerned 
with  predicting  actions,  such  as  firms' 
choice of accounting policies and how firms 
will respond to proposed new accounting 
standards.  However,  Adhikara  (2020) 
explains  appropriate  accounting  with  the 
knowledge and use to explain and predict 

Agnes Claudia, Menik Indrati                                                                                                 | 67 
accounting  practices.  Positive  Accounting 
Theory  (PAT)  is  an  accounting  theory  put 
forward  in  the  literature  that  can  explain 
accounting  practices  and  anticipate  the 
causes of phenomena that occur now and 
their  effects  or  impacts  in  the  future 
(Siallagan, 2020). 
 
Stock Price 
Simply  put,  the  stock  is  defined  as  a 
sign of ownership of a person or entity in a 
company.  The  stock  symbol  is  a  piece  of 
paper explaining that the paper's owner is 
the  company  that  issued  the  document. 
Buying  is  interpreted  by  storing  in  a 
different  place,  namely  in  the  capital 
market  (Muklis,  2016).  According  to 
Hartono (2016), the stock price is defined 
as a stock that occurs in the capital market 
at  a  specific  time  determined  by  market 
participants on the demand and supply of 
related  shares  in  the  capital  market.  The 
share  price  is  the  price  of  a  company's 
shares  traded  on  the  stock  exchange, 
whose value is determined from the forces 
of demand and supply (Halimatussakdiah, 
2018). 
Return on  Assets  (ROA)  is  the  capital 
invested in assets needed to generate net 
income  (Sujarweni,  2017).  Tampubolon  & 
Saptomo (2020) An increase in Return On 
Assets  (ROA)  can  also  increase  the 
company's stock price. In this case, it means 
that  Return  On  Assets  (ROA)  has  a  high 
value  in  generating  profits  known  to 
increase the company's stock price.  
Where  the  profit  generated  by  the 
company increases, the results obtained by 
the  company  are  high  profits,  thus 
attracting  investors  to  conduct  stock 
buying and selling transactions (Watung & 
Ilat, 2016).  
Return on  Assets (ROA) measures the 
overall  effectiveness  of  management  in 
obtaining profits by using available assets. 
The  more  assets  owned  by  the  company 
will  increase  the  purchase  of  shares  of 
investor  confidence  in  the  company, 
increasing  the  stock  price  in  the  market. 
And  has  a  positive  effect  on  stock  prices 
(Mogonta & Pandowo, 2016). 
Based  on  the  description  above,  the 
following hypothesis is proposed: 
H1: Return on Assets (ROA) has a positive 
effect on stock prices. 
By  strengthening  the  company's 
performance  through  efforts  to  improve 
financial  ratios  such  as  Return  On  Equity 
(ROE)  and  providing  more  transparent 
information, investors can use it as a guide 
in making investment decisions (Wulandari 
&  Badjra,  2019).  This  is  strong  because 
good  news  can  encourage  investors  to 
invest in the company. 
Increase in Return On Equity (ROE), and 
shareholders will get  high  growth so  that 
Return  On  Equity  (ROE)  will  cause  an 
increase in  stock prices  so  that  there is  a 
positive  relationship  between  Return  On 
Equity  (ROE)  and  stock  prices  (Ani  et  al., 
2019). 
According to Ambarwati et al. (2019), 
Komang  et  al.  (2019),  and  Wulandari  & 
Badjra (2019) found a positive relationship 
between  an  increase  in  Return  On  Equity 
(ROE) which can increase stock prices and 
the company's stock price.  
Based  on  the  description  above,  the 
following hypothesis is proposed: 
H2: Return on Equity (ROE) has a positive 
effect on stock prices. 
Earning Per Share (EPS) is the amount 

68 | Analysis of Effect on Asset Return, Return on Equity, Earning Per Share, and Net Profit 
Margin on Share Price on Banking Company 
 
during  a  certain  period  of  each  common 
share  outstanding  which  is  calculated  by 
dividing the  total  period of earnings held 
by ordinary shareholders by the number of 
ordinary  shares  outstanding  (Gitman, 
2003).  According  to  Alipudin  (2016), 
Earning Per Share (EPS) is income on profits 
to  be  obtained  by  shareholders  per  each 
share,  and  Earning  Per  Share  (EPS)  is 
obtained.  It  can  be  used  as  a  signal  for 
investors before investing.  
Earning  Per  Share  (EPS)  is  obtained 
from comparing net income after tax with 
the  number  of  shares  outstanding.  An 
increase  in  Earning  Per  Share  (EPS)  will 
increase  the  stock  price  so  that  the 
company's  performance  is  said  to  be  in 
good  condition  (Ani  et  al.,  2019).  In  the 
study of Efendi et al. (2016), Watung & Ilat 
(2016), Alipudin (2016), and Al Umar & Nur 
Savitri (2020) found a positive relationship 
between Earnings Per Share (EPS) and stock 
prices. Al Umar & Nur Savitri (2020) stated 
Earning Per Share (EPS) could increase the 
company's stock price.  
Based  on  the  description  above,  the 
following hypothesis is proposed: 
H3: Earning Per Share (EPS) has a positive 
effect on stock prices. 
According  to  Kasmir  (2012),  the  Net 
Profit  Margin  (NPM)  ratio  is  used  to 
measure  the  company's  ability  to  obtain 
net profit from main operational activities. 
This ratio is considered adequate because 
it  assesses  the  company's  primary 
operations  as  a  whole  so  that  many 
investors  believe  the  balance  before 
deciding to invest in a company. It can be 
said that the increase in Net Profit Margin 
(NPM)  will  affect  the  level  of  company 
performance so that it will improve and can 
increase stock prices, and with that will lead 
to  investor  confidence  to  invest  in  the 
company (Watung & Ilat, 2016). 
The  higher  the  Net  Profit  Margin 
(NPM)  value,  the  more  efficient  the 
company is  to  get  profits from  sales.  The 
higher  the  Net  Profit  Margin  also  shows 
that  the  company  can  reduce  costs  well. 
Therefore,  (Wulandari  &  Badjra,  2019) 
states the Net Profit Margin (NPM), where 
the  increase  can  positively  affect  the 
company's stock price.  
Based  on  the  description  above,  the 
following hypothesis is proposed: 
H4: Net profit margin (NPM) has a positive 
effect on stock prices. 
Return  on  Assets  (ROA)  is  an  overall 
management  measure  in  obtaining 
adequate profits by using available assets. 
Also, the more support the company owns 
will  increase  the  purchase  of  shares  of 
investor  confidence  in  the  company 
making  the  stock  price  in  the  market 
increase (Mogonta & Pandowo, 2016). 
By  strengthening  the  company's 
performance  through  efforts  to  improve 
financial  ratios  such  as  Return  On  Equity 
(ROE)  and  providing  more  transparent 
information, investors can use it as a guide 
in  making  investments  (Wulandari  & 
Badjra, 2019).  
According  to  Alipudin  (2016), 
Dominated that the level of fluctuations (up 
and  down)  Earning  Per  Share  (EPS)  will 
affect stock prices. Earning Per Share (EPS) 
is income on profits that shareholders per 
share  will  obtain.  Earning  Per  Share  Per 
Share  (EPS)  is  made  and  can  be  used  to 
signal  investors  before  investing.  The 
higher  the  Net  Profit  Margin  (NPM),  will 
affect the level of company performance. It 

Agnes Claudia, Menik Indrati                                                                                                 | 69 
Will be better and can lead to an increase 
in  stock  prices  and  with  that  will  lead  to 
investor  confidence  to  invest  in  the 
company (Watung & Ilat, 2016). This means 
that if the Return On Assets (ROA), Return 
On  Equity  (ROE), Earning Per Share  (EPS), 
and  Net  Profit  Margin  (NPM)  variables 
increase or decrease, it will have an impact 
on increasing and decreasing share. Price in 
the company (Purwanti, 2020). 
Based  on  the  description  above,  the 
following hypothesis is proposed: 
H5:  Return  On  Assets  (ROA),  Return  On 
Equity (ROE), Earning Per Share (EPS), Net 
Profit Margin (NPM) have a positive effect 
on stock prices. 
 
METHODS 
 
In this study,  there  is  one  dependent 
variable  on  stock  prices  and  four 
independent  variables,  namely  Return  On 
Assets  (ROA),  Return  On  Equity  (ROE), 
Earning  Per  Share  (EPS),  and  Net  Profit 
Margin (NPM). Return On Assets (ROA) is 
measured by dividing net income by total 
assets in the company. E. F. Brigham & Joel 
F. Houston, (2008).  Return On Equity (ROE) 
with  ordinary  equity  and  net  income  on 
common  equity  measures  the  level  of 
ownership  of  common  stockholders  E.  F. 
Brigham  &  Joel  F.  Houston,  (2008).    Net 
Profit  Margin  (NPM)  is  calculated  by 
dividing the total net profit earned by the 
company  by  each  sale  made  (Pratama  & 
Erawati, 2016). Earnings Per Share (EPS) by 
dividing  the  number  of  ordinary  shares 
produced  during  a  specific  period  by  the 
number of  shares outstanding distributed 
by  dividing  the  total  income  available  to 
ordinary  shareholders  by  the  number  of 
ordinary  shares  outstanding  (Gitman, 
2003).  
The  research  design  used  is  causal 
research.  In  the  causal  analysis  using  a 
quantitative  approach  because  this 
research is  about the  effect of  Return On 
Assets  (ROA),  Return  On  Equity  (ROE), 
Earning  Per  Share  (EPS),  and  Net  Profit 
Margin (NPM) on stock prices in the capital 
market by proving the significant influence 
of  the  independent  variable  on  the 
dependent variable (Mogonta & Pandowo, 
2016) 
The  population  in  this  study  are 
companies in the banking sector listed on 
the  Indonesia  Stock  Exchange.  This  study 
uses  secondary  data  in  the  form  of  the 
company's  annual  financial  statements 
sourced  from  the  official  website  of  the 
Indonesia  Stock  Exchange 
(https://www.idx.co.id). For the period 2017 
-  2019.  The  sample  in  this  study  was 
selected as many as 35 companies for three 
years, namely 2017 – 2019. The number of 
financial statements that were sampled in 
the  study  was  105  financial  statements. 
sampling is a sampling technique used by 
purposive  sampling  using  only  certain 
considerations  to  obtain  a  representative 
sample  that  is  adjusted  to  the  criteria, 
namely  researchers  from  conventional 
banking companies that have consecutive 
positive  profits  in  the  annual  financial 
statements.  
 

70 | Analysis of Effect on Asset Return, Return on Equity, Earning Per Share, and Net Profit

Margin on Share Price on Banking Company

Figure 1. Research Model

These multiple linear regression

analysis techniques are needed in various

decision-making in both policy and

management and use SPSS software

(Statistical Package for Social Science)

version 26. The multiple linear regression

equation models in this study are as

follows:

Regression of linear equations

regression

Where:

Y: the price of Shares

α: Constants

regression coefficient Return on Assets

regression coefficient Return On Equity

regression coefficient Earning Per Share

The regression coefficient Profit Margin

Values Return On Assets

: Value of Return On Equity

: Value of Earning Per Share

: Value of Net Profit Margin

ℯ : Error

Table 1. Operational Variable

No.

Variables

Measuremen

Scale

Dependent

Stock

Price The

closing price

of shares at

the end of the

period

Nominal

Independent

Return

On Assets

)

Return On

Assets =

Net profit

after tax

Total assets

Ratio

Return on

Equity

)

Return on

equity =

Net profit

after tax

Total equity

Ratio

Earnings

per share

)

Earnings per

share =

Net profit

after tax

Number of

outstanding

Ratio

Net profit

margin

)

Net profit

margin =

Net profit

after tax

Interest

income

Ratio

RESULTS AND DISCUSSION

In this study, the research object

was 35 companies with three years of

observation, namely 2017 to 2019. In the

normality test of data and classical

assumptions, it was proven that each

variable had a significance level above 0.05,

which means the distribution of standard

data and classical assumptions. Normality

test in one variable is not always needed in

the analysis, but statistical tests' results will

be better if all variables are normally

distributed. It deserves further testing.

Y= α + β

+ β

ℯ

Agnes Claudia, Menik Indrati | 71

Descriptive statistical analysis

provides an overview of the data consisting

of minimum, maximum, average (mean),

and standard deviation. Statistical analysis

tests show that N or the amount of data for

each valid variable obtained 78 of 105 price

sample data, the minimum value is 73.00,

the maximum value is 29100.00 from the

2017-2019 period, the average value is

3081.203081, 20, and the standard

deviation value is 4993.12.

Table 2. Test Results Analysis Descriptive

Statistics

Descriptive statistics

Maxi

mean

Std.

devi

atio

Stock

price

73,

2910

0.00

3081,1

923

4993

,113

ROA

,09

69.0

3,4382

10,6

8446

ROE

,14

20,4

9,5104

5,75

288

EPS

,43

1159

,00

191 ,5

901

272,

9805

NPM

2.0

11.6

5.3764

1.72

919

Valid

(listwis

Source: Data processed by SPSS 26

A normality test is used to

determine whether the data is taken from a

normally distributed population or not.

Testing for normality using the Kolmogorov

Smirnov test shows that the data used in

this study is generally distributed asymp

sig0.200 levelc. the number is greater than

the significance of 0.05, and the data can be

used in testing the regression model.

Table 3. Normality Test Results

One-sample kolmogov-smirnov test

Unstandardize

d residual

Normal

parameters

Mean

.0000000

Std.

deviation

,55401723

Most

extreme

differences

Absolute

,078

Positive

,078

Negative

-,0,54

Test statistic

0,78

Asymp. Sig. (2-tailed)

,200

a. Test distribution is normal

b. It is calculated from data.

c. Lilliefors significance correction

d. Lower bound of the true

significance.

Source: Data processed by SPSS 26

Multicollinearity test was used to test

whether the regression model found a

correlation between independent variables.

This multicollinearity test uses the

tolerance value. The Variance Inflation

Factor test results from the multicollinearity

(VIF) of each variable indicate that the

Variance Inflation Factor (VIF) value has a

research value not more than ten and when

viewed from the value tolerance. Has a

value of less than 0.1. So, each independent

variable in this study is free from

multicollinearity in the regression model.

Table 4. Test Results Multicollinearity

Coefficients

Model

collinearity Statistics

Toleranc

VIF

72 | Analysis of Effect on Asset Return, Return on Equity, Earning Per Share, and Net Profit

Margin on Share Price on Banking Company

(Constant)

Lag_Ln_ROA,

317

3.155

Lag_Ln_ROE,

216

4.632

Lag_Ln_EPS,

294

3.406

Lag_Ln_NPM,

554

1,804

Dependent Variable: Lag_Ln_Harga Chart

Source: Processed Data SPSS 26

Test heteroscedasticity was conducted

to examine whether the regression model

of variance is not the same from one

observation to another observation. Based

on the scatterplot image, it is known that

the points spread in a pattern so that the

assumption of no heteroscedasticity can be

fulfilled. The heteroscedasticity test in this

study shows that the probability (sig) in

each regression model used is more

significant than 0.05 or 5%, so that it can be

stated that there are no symptoms of

heteroscedasticity.

Picture. 2. Test Results Heteroscedasticity

Source: Data processed with SPSS 26

The autocorrelation test determines

the correlation between disturbance

variables so that the estimator is no longer

efficient in both small models and large

samples. One way to test autocorrelation is

the Durbin-Watson experiment. The linear

regression model in this study has a

positive autocorrelation. Because the data

has positive autocorrelation, the authors

apply the Cochrane Orcutt transformation.

Based on the table, it is known that the

Durbin-Watson value of 1.810 is greater

than the upper limit (dUL) 1.7407 and

smaller than 4-dU (4-1.7407 = 2.2593). The

accepted H0 states that there is no positive

correlation or negative according to the

decision table dU < d < 4-dU or 1.7407 <

1.810 < 2.2593. So it can be said that the

linear regression model in this study is free

from autocorrelation.

Table 6. Test Results Autocorrelation

Model Summary

del

Squa

Adju

sted

Std. Error

Of The

Estimate

Dur

bin-

Wats

on,

857

734,

720,

56 920

1,81

Predictors: (Constant), Lag_Ln_NPM

Lag_Ln_ROE, Lag_Ln_ROA, Lag_Ln_EPS

Dependent Variable: Lag_Ln_Harga Chart

Source: Data processed by SPSS 26

Test Coefficient of Determination Table

shows that the correlation R shows the

result is 0.857. This indicates that the

correlation between ROA (X1), ROE (X2),

EPS (X3), and NPM (X4) on the market share

price (Y) has a strong relationship.

Table 7. Determination Coefficient Test

Results

ModelSummary

Mode

Squa

Adjus

ted R

Std.

Error Of

The

Esti

mate

,857

734,72

56 920

Agnes Claudia, Menik Indrati | 73

Predictors: (Constant), Lag_Ln_Npm

Lag_Ln_Roe, Lag_Ln_Roa, Lag_Ln_Eps

Source: Data processed by SPSS 26,

The results of the multiple linear

regression analysis models based on

equality between the independent

variables on variables are as follows:

Y = 2.259 + 0.037ROA − 0.666ROE +

0.820EPS + 0.476NPM + e

The equation can be interpreted: The

value (constant) is 2.259. This explains that

all independent variables are equal to zero.

The predicted price is 2.259. ROA affects

stock prices with a regression coefficient of

0.037, which means that the ROA variable

has a positive effect on the stock price

variable. Under conditions where other

variables are constant, if one unit of ROA

increases, the price is predicted to increase

by 0.037. ROE on stock prices has a

regression coefficient of -0.666, which

means that the ROE variable is detrimental

to the stock price variable. Under

conditions where other variables are

constant, if one unit decreases ROE, the

price is predicted to fall by 0.666. EPS

affects stock prices with a regression

coefficient of 0.820, which means that the

EPS variable has a positive effect on the

price variable. Under conditions where

other variables are constant, if one unit of

EPS increases, the price is predicted to

increase by 0.820. NPM affects stock prices

with a regression coefficient of 0.476, which

means that the NPM variable has a positive

effect on the price variable. Under

conditions where other variables are

constant, if one unit of NPM increases, the

price is predicted to increase by 0.476.

The F test is that decision-making on

the hypothesis can be done by comparing

the calculated F significance value with a

research significance level of 0.05. If the

significance value of calculated F < 0.05,

then this affects the effect between

variables as a whole on the statistically

significant effect variable. However, if the

significance value of F arithmetic > 0.05, the

overall impact between variables on the

affected variables is not statistically

significant. Based on the table, the

calculated F significance value is 0.000.

Because the significance value of calculated

F is less than 0.05, it can be said that the

variables simultaneously have a statistically

significant effect on the variables. Then it is

stated H5 (Hypothesis 5) that ROA, ROE,

EPS, and NPM have a simultaneous impact

on the stock price of banking companies on

the Indonesia Stock Exchange for the 2017

– 2019 period, which are accepted.

Table 8. Test Results Simultaneous F

(Statistic F)

Anova

Sum

Squa

res

Mea

Squa

Regr

essio

64,

460

16.1

49.7

40,

Resid

ual

23.3

324

Total

87.7

a. Dependent Variable: Lag_Ln_Harga

Stock

b. Predictors: (Constant),

Lag_Ln_NPM Lag_Ln_ROE,

Lag_Ln_ROA, Lag_Ln_EPS

74 | Analysis of Effect on Asset Return, Return on Equity, Earning Per Share, and Net Profit

Margin on Share Price on Banking Company

Source: Data processed by SPSS 26

T-Test to determine whether the

regression equation model formed partially

by independent variables (X1, X2, X3, and

X4) significantly affect the inhibition

variable (Y). The t-test shows that ROA

partly does not affect stock prices because

the results of t count (0.337) < t table

(1.996) and the significance level is more

significant than 0.05, which is 0.737. ROE is

partially detrimental to stock prices

because t count (-4.115) > t table (-1.996)

and the level is significantly less than 0.05,

which is 0.000. EPS partially has a positive

effect on stock prices because t count

(10.392) > t table (-1.996) and the

significant level is 0.05, which is 0.000. NPM

partially does not affect stock prices

because NPM t count (1.401) < t table

(1.996) and the significance level is more

significant than 0.05, which is 0.166.

Table 9. Hypothesis T-Test Results

(Statistics T)

Descriptive Statistics

Model Unstandardized Coefficients

Standardized Coefficients T

Sig.

B Std. Error Beta

1 (Constant) 2.259,

7.271 311,000,

Lag_Ln_ROA 037,111

0,36, 337,737

Lag_Ln_ROE -, 666,162

-, 538 -4.115,000,

Lag_Ln_EPS 820,079

1.165 10.392,000,

Lag_Ln_NPM 476,340,

114 1,401, 166

a. Dependent variable: Lag_ln_stock

price

Source: Data processed with SPSS 26

This study is based on hypothesis 1,

where ROA does not affect stock prices is

rejected. The results of this study are the

same as the research conducted by

(Wulandari & Badjra, 2019), which proves

that ROA reflects how efficiently the

company uses its assets to generate profits.

Different from (Egam et al., 2017) that ROA

is also caused by investors who only see the

ability from within the company to

generate profits, but also see risks from

outside the company such as tariff

increases, politics, inflation, natural

disasters, and changes in economic policies

so that there is no investor interest in

investing.

Based on hypothesis 2, namely, ROE

has a negative and significant effect on

stock prices, and the results are rejected.

The results of this study are the same or

consistent with the results of research

conducted by (Mogonta & Pandowo,

2016), which means that equity in the

company affects a decrease usually follows

the market share price of banking

companies, an increase in ROE in stock

prices because ROE is related to the

company's ability to earn profits clean

(Purwanti, 2020). This can happen because

investors assess ROE which can lower stock

prices. After all, equity has not been used as

an investor in determining stock prices.

Hypothesis 3 EPS partially positive and

significant effect on the stock price

received. The results of this study are the

same or consistent with the results of

research conducted by Almira & Wiagustini

(2020). The higher the EPS, the more

Agnes Claudia, Menik Indrati                                                                                                 | 75 
attractive investors will be to invest so that 
the stock price rises. EPS represents income 
on  profits  obtained  by  shareholders  per 
share and EPS obtained and can be used as 
a signal for investors before investing. This 
is  corroborated  by  empirical  evidence 
conducted by (Alipudin 2016). 
Hypothesis  4  when  NPM  does  not 
affect stock prices, the results are rejected. 
The  results  of  this  study  are  the  same  or 
consistent  with  Husaini  (2012)  that  the 
effect  of  NPM  does  not  indicate  that 
investors  in  investing  do  not  take  into 
account the NPM variable to predict prices. 
This happens because the company has not 
been able to manage NPM properly. It does 
not  measure  investors  to  assess  stock 
prices  and  interest  income  which  small 
banks  can  do  because  they  follow  Bank 
Indonesia interest rates. It is less attractive 
for investors to use NPM as an indicator in 
assessing prices share. 
 
CONCLUSION 
 
The research data is 35 companies with 
banking companies as objects listed on the 
Indonesia  Stock  Exchange  during  2017  - 
2019,  so  that  the  research  sample  is  35 
samples, namely 105 companies. This study 
has  partial  regression  results,  which show 
that ROA does not affect stock prices, ROE 
does  not  affect  stock  prices,  EPS  has  a 
positive  effect  on  stock  prices,  and  NPM 
does not affect stock prices. In this study, 
the author has limitations in using research 
data samples for three years, namely from 
2017  -  2019,  and  only  a  few  banking 
companies  have  complete  research 
variables.  For  further  researchers,  it  is 
recommended  to  increase  the  research 
period  of  5  years  to  produce  better 
research  and  use  other  variables  to 
overcome  profitability  in  financial 
statements  by  adding  the  variable 
operating  costs  to  operating  income 
(BOPO).  The  BOPO  ratio  measures 
operational activities in the company if the 
BOPO  value  is  low.  If  the  company 
management  is  inadequate,  then  the 
company management successfully carries 
out its operational activities, thus causing a 
higher level of profitability, which can affect 
better  financial  performance  and 
encourage investors to continue investing 
their funds to increase the share price. 
 
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Agnes Claudia, Menik Indrati                                                                                                 | 77 
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